LA Biz Observed archive

Mark Lacter covered business, the economy and more here from 2006 until his death on Nov. 13, 2013.
The entire LA Biz Observed archive — more than 10,000 blog posts by Mark — remains online and available.
March 2013
irani.jpg He's baaaack - actually, Ray Irani never really left the L.A.-based oil company. He just moved himself to the chairman's position after a shareholder revolt over his scandalously high compensation left the board with little choice. Now he's orchestrating the firing of Stephen Chazen.

L.A. jobs picture brightens, led by entertainment

jobs6.jpg This is often a wackadoodle time of year for the state bean counters who assemble the employments stats, so the new numbers for February aren't especially surprising.

Four Seasons sprouting up all over L.A.

fourseasons.jpg There's the celebrity-studded South Doheny location, of course, but the Four Seasons name can also be found in Beverly Hills (aka the Beverly Wilshire Hotel) and in Westlake Village (owned by billionaire David Murdock). That's more Four Seasons in one metro area than anywhere else in the world.
lauer.jpg What is it with those guys? Can't they handle internal issues internally? Latest hoo-ha is over an NBC executive reaching out to CNN's Anderson Cooper about replacing Matt Lauer before the end of the year.

Like it or not, time for City Hall to start chopping

cityhall3.jpg Try as they might to make the budget deficit go away, members of the L.A. City Council must start to face reality (or at least City Hall's version of reality.)

Hollywood production stat that gets little attention

amazon5.jpg Web-based shooting is getting to be a big deal in L.A., at least a bigger deal than might be realized. It's an important counterpoint to the ceaseless chatter about the perils of runaway production.

Space X capsule splashes down

spacex8.jpg Another mission is in the books for the Hawthorne-based company as the cone-shaped Dragon capsule hits the water about 250 miles west of Baja.

Does moving the 'Tonight Show' pencil out for NY taxpayers?

tonight.jpg More broadly, you have to wonder how many people really care where these shows are produced. Carson did have a different vibe in NY and L.A., but only because both cities had distinctive personalities in the 60s and 70s.
r-rated.jpg Except they're apparently not having much luck. Only one-in-four are able to buy tickets to R-rated movies, according to a Federal Trade Commission survey.

Bill Clinton endorsing Wendy Greuel? But why?*

clinton.jpg This is certainly good news for a campaign that's been a little glassy-eyed of late. And yet it's hard to understand how the former president has much genuine understanding of L.A.'s problems.

L.A.'s terrible jobs report for January

jobless5.jpg The jobless rate rose slightly and 81,000 payroll jobs were lost. The entertainment industry not only saw a drop of 14,000 jobs, but the December numbers were revised sharply downward.

New Google Chrome ads the work of hot L.A. firm

They're taking an irreverent, Web-friendly approach - a notable contrast from the heartwarming schtick that had been used by the previous agency.

Hollywood has a good weekend, but....

croods.jpg No "Hunger Games"-type runaway train so far this year, which is why the overall box office is down 13 percent from 2012 and attendance is off 14 percent.
wendy.jpg That's been the basic strategy of the entire campaign: Say as little as possible, line up as many constituencies as possible, and hope for the best.

L.A. becomes major center for Kickstarter funding

kickstarter2.jpg The online fundraising site has helped finance 122 projects in L.A., topped only by NY with 144 (SF is third, with a curiously low 67 projects).
penney.jpg Plano, Texas, just outside of Dallas, is where the retailer has its headquarters, but it's not where several of the top executives are living full time.
cordcutting.jpg The pay-TV business (that includes cable, satellite, and telco) saw only modest growth in 2012, which will add fuel to claims that viewers - especially young viewers - are switching to cheaper ways of accessing content.
leno2.jpg Leno's contract expires in the fall of 2014, and NBC wants to make the change by then. As part of the change, the network wants to move the "Tonight" show back to NY.

Want clarity on the NFL's return to LA? Lots of luck

leiweke2.jpg Time for Commissioner Roger Goodell's periodic non-statement about getting a team back in town. At least this one came with a prop: Denver billionaire Philip Anschutz, who will take over the NFL-in-L.A. staring contest now that Tim Leiweke is out of the picture.
kickstarter.jpg Forget about the traditional old-fart patronage of the arts - the primary focus is on philanthropy that generates some sort of tangible return.

Here's why housing is such a problem for low-wage workers

rentalwage.jpg It's next to impossible for minimum wage workers to afford a standard two-bedroom apartment without having to pay more than 30 percent of their income.

TV audiences aren't where they used to be

girls.jpg Only 632,000 viewers watched the season two finale of HBO's "Girls" at its regularly scheduled time, which is a sharp decline from the million or so who watched the last show of the first season. But it's not as clear cut as it sounds.

California ties for highest unemployment rate in U.S.

Higher even than long-time laggard Nevada, although job growth has been outpacing the nation as a whole over the past year.

Leiweke on Anschutz: Not much of a football guy

anschutz2.jpg Anschutz, in fact, had to be dragged into the deal for a downtown stadium. That makes his comments last week about wanting to work with the NFL a little suspect.
villaraigosa3.jpg When and if the NFL determines that L.A.would be an attractive market, we are always willing to listen. But with the city facing so many challenges, from jobs to traffic to education, it's time for us to move on.

Dow's 10-day winning streak is snapped

C'mon, you knew it would happen eventually. Today's 25-point decline, to 14,514, is only a taste of what we'll likely see in the coming days and weeks.

Getting back to reality on Convention Center

convention.jpg Assuming that the AEG-financed makeover of the Convention Center doesn't happen because the AEG-financed football stadium will never be built, City Councilwoman Jan Perry wants to explore alternatives. Good idea.
anschutz2.jpg The Denver billionaire said he was concerned about the "noise" being created concerning the value of AEG (perhaps another way of saying he wasn't getting what he thought the company was worth).

Curtains for downtown football stadium?*

farmers5.jpg The unexpected departure of AEG CEO Tim Leiweke, along with growing doubts among league officials about the financial viability of the proposed facility, may not be the death knell, but it's close.

Breaking: Anschutz terminates AEG sale, Leiweke leaves

AEG2.jpg The sports and entertainment empire has been taken off the market, the company announced. Also, CEO Tim Leiweke is leaving AEG, to be replaced by Dan Beckerman.

Why water contamination at LAX was kind of a good thing

utility2.jpg Since back-room utilities are never seen by passengers, fixes have been deferred until now. Installing an entirely new system makes sense, despite not having clean water for most of Wednesday.

How to finance a movie on Kickstarter - no, really

veronica.jpg In less than 12 hours on Wednesday, fans of the series "Veronica Mars" pledged more than the $2 million needed to produce a movie version.

Dow winning streak continues, if only barely

The blue-chip index, which stands at 14,455, is way overdue for a pullback (markets can't go up forever), though the economic trend lines remain positive.

Continued gains in Socal housing market

homesalesfeb.JPG The number of homes selling for $500,000 or more jumped 54 percent from a year earlier - another sign that the market is now centered on higher-end buyers (many of them investors, many offering all cash) who are driving up the prices.
lat2.jpg My gut tells me it's not going to happen (I wouldn't be surprised if their interest stirs up other possible buyers), but if the Kochs get it they get it. The world will not come to an end.

Hooray, Twinkies are coming back

twenkies.jpg They should return to store shelves by summer. Also back in business is Wonder Bread.

L.A.'s biggest law firm? You might be surprised

lawyers.jpg Lewis Brisbois Bisgaard & Smith grabs the top spot in the Business Journal's annual ranking. It's known as the place to go when you want to save some money.

Why boost in L.A. tourism is not such a great thing

tourism.jpg More than 200,000 people are employed in tourism-related positions. What's not so nice - and what gets little attention among local boosters - are the low wages many of these jobs command.

Why eToys IPO still matters 14 years later

etoys.jpg The offering price was $20 a share, but on the first day of trading the stock closed at $77. eToys raised $164 million, but it could have been several times that number had the company been priced to reflect demand.

Another blow for Bunker Hill *

KPMG.jpg Accounting giant KPMG will move out of its Grand Avenue offices later this year, choosing instead a Hope Street location that's closer to LA Live. Other professional firms are doing the same.

Online trading site Intrade shuts down

No word on what finally brought down the operation, though a board announcement says there "may be financial irregularities."

Hollywood's marketing muscle at play in big 'Oz' opening

oz.jpg It's a lesson on how well-placed TV ads (Super Bowl, Oscars, etc.), along with a dozen or so cover stories and a wide presence in social media can create interest in a film that has received okay but not great reviews.

Big jump in U.S. movie and TV employment

moviejobs.jpg.jpg Hollywood is a highly cyclical business, of course, and so employment levels tend to bounce around from month to month. This being TV pilot season could be one explanation for a bump - as well as a pickup in the number of commercials being shot.
smosh.jpg That may be pushing things, but Alloy Digital is where the Smosh guys hang their hats, and ... you mean you haven't heard of the Smosh guys? Have a seat.

More flim-flam from Villaraigosa

measureA3.jpg Just three days ago I reluctantly but dutifully voted for Measure A, the proposed half-cent sales tax hike that was supposed to pare down the city's mountainous deficit. Now L.A.'s mayor says it's not so bad after all.
flynt3.jpg The publisher of Hustler bought the Wilshire Boulevard property almost 20 years ago for $18.8 million, so we're talking about a nice return.
dodgers2.jpg That's probably due to continuing questions about how much of the money will be handed over to the league as part of the revenue-sharing arrangement with other teams. This could turn out to be an important snag in the 25-year $7-billion TV deal.

Hollywood holding its breath for 'Oz'

oz.jpg The Disney prequel will pull in $80 million+ this weekend, according to Deadline, and they're already revving up the sequel machine. But can those early numbers translate into a long term franchise (the early reviews are not good).
anschutz2.jpg We all want to know about the horse race of bidders, and yet there's no way to determine how each sale is unfolding and what the eventual outcome will be. The sellers aren't talking, at least publicly, and the unnamed sources who pop up in news stories are notoriously unreliable.
timemag.jpg Forget about the plan to have Meredith Corp. take over People and other lifestyle titles, with Time Warner keeping Time, Fortune, Money, and SI.
measureA.jpg You got me. L.A. voters handily defeated Measure A, which would have added a half penny to the sales tax and generated enough revenue to make up most of next year's shortfall. They apparently didn't trust city officials to spend the money wisely. So does anyone have any bright ideas on finding $200 million?
Not income inequality, wealth inequality - that is, the imbalance of people with or without enough money to spend on items that go above and beyond a daily or monthly nut.

Why Angelenos didn't give a damn about this election

traffic2.jpg Actually, I feel kind of sorry for the folks running for mayor - they all meant well, and goodness knows, they've worked hard. But they're not exactly natural born leaders. Hell, let's just say it: They were the dullest group of candidates I can ever recall following.

Dow closes at record high - and yes,it is a big deal

dowrecord.jpg You can cite all sorts of reasons why we shouldn't be taking the new record all that seriously: The index is only made up of 30 companies and it's weighted in a strange way. It doesn't account for inflation. It doesn't reflect the overall economy. And yet the psychological boost to the financial world is hard to deny.
dominguez.jpg For aviation buffs, Dominguez Hills is a very big deal. In 1910, it was the site of the nation's first air show, what the LAT called "one of the greatest public events in the history of the West."
prince.jpg Not all rich people are alike when it comes to telling the world exactly how much they are worth. Some spin off their holdings and conduct business under different names in order to avoid getting on the Forbes rich list, some are indifferent to the notoriety, and some, like Prince Alwaleed Bin Talal of Saudi Arabia, are obsessed with being ranked as high up as possible.

Dow tops record

Stocks have taken off in the first hour of trading, with the Dow index at around 14,259, which is almost 100 points higher than its record close of 14,164 on Oct. 9, 2007 - before the recession and financial meltdown.
latimes-from-broadway.jpg The package deal would include the LAT, Chicago Tribune, Baltimore Sun and six other daily papers, Bloomberg reports, citing sources. A single transaction would be easier, but it would also mean fewer interested parties. Several potential bidders have shown some interest in individual papers, but not the entire portfolio.
applestock.jpg His name is Andy Zaky and his upbeat forecasts about Apple had been largely spot on - so much so that he gained a large following of admiring investors who were convinced that what went up would keep going up. Not quite.
downton.jpg Turns out that the show has become a sensation among financial planners and lawyers who say that the Earl of Grantham's mishandling of money can be a lesson for today's investors.

Sizing up the mayor's race

cityhall2.jpg In a word, sigh. Even by the normally uninspired nature of LA elections, this one has often resembled a campaign for class president. High school class president. How did it get this bad?

LAT poll: Proposed sales tax hike has majority support

cityhall3.jpg Some surprising numbers in an LAT/USC poll that show 53 percent of likely voters will definitely or probably cast their ballots for Measure A, which push's the city's sales tax rate to 9.5 percent from 9 percent. This is bad public policy, but there may not be much choice.

Is anybody watching Piers Morgan?

morgan.jpg Well yeah, 87,000 viewers in the prime 25-54 demographic the other night, which even by cable news standards is practically public access territory.
spacex7.jpg While there have been a few miscues in previous launches, this appears to be the most serious.

Has Lakers' poor season affected ratings?

lakers5.jpg Perhaps a bit, according to Nielsen numbers for the first half of the season. Games on Time Warner Cable's SportsNet averaged a 4.3 rating, which is down 10 percent from the like period during the 2010-2011 season (last year was shortened because of the lockout).
AEG2.jpg The Santa Monica.-based investment firm Colony Capital appears willing to pay more than the other bidders, but its offer for Anschutz Entertainment said to be below the $8 billion or so asking price.